VAT on Promotional items
I have been asked many times about the supply of promotional items and VAT charges so to clarify the majority of promotional items we supply will have VAT charged apart from the following:
Childrens clothing – There is no VAT charged on items such as school uniform.
Construction Hard Hats supplied with your logo – There is no VAT charged on branded Hard Hats with your logo on.
Promotional products in magazines – If you link a cover-mounted item such as a sachet of perfume or a CD to a magazine, you can treat it as zero-rated if the following conditions are met: you do not make a separate charge for it, and issues with cover mounted items are sold at the same price as those that do not, and the cost to you of the cover mounted item or items included in any individual issue does not exceed:- 20% of the total cost to you of the combined supply (excluding VAT), and- £1 (excluding VAT).
This linking of goods is normally done by the publisher, but can take place at any point in the distribution chain (for example, distributor, retailer).
If at the point of linkage the supply satisfies the terms of this concession, it becomes a single zero-rated supply and will continue to be a single supply throughout the chain.
If the supply does not satisfy the terms of the concession, you will have to consider whether the supply is a single or multiple supply under the normal rules explained above.
Further information about single and multiple supply can be found in HMRC’s internal guidance available at VAT Guidence
All other items will have VAT charged but the good news is that if you are registered for VAT you can claim it back. See info here: Claim Back VAT
Any further questions comment below and will respond (via my accountant of course.)
Happy tax free promoting!!!
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